Investors have been nervous about the digital advertising sector in 2022. Nearly every stock in this market segment has underperformed the S&P 500 this year, with ripple effects stretching into pretty much every nook and cranny of the global economy. Companies don't dare to splurge on ad campaigns when the economy is bad. When advertisers are holding back, that's terrible news for both buyers and sellers of advertising space.

However, there's a glimmer of light at the end of the tunnel. Savvy investors are looking for a return to normalcy in the advertising industry, and The Trade Desk (TTD -1.80%) stands out as a particularly interesting stock in this sector today. However, before you go all-in on The Trade Desk's stock, here are a few things you should know about the company and the investment.

1. The Trade Desk is a giant in its field

The Trade Desk was one of the first pure-play providers of advertising services on the ad-buying side. The company has partnered up with many publishing platforms and sells ad space on these platforms through a self-serve system. Ad buyers have access to tons of data on their marketing program's performance and the management of each program is automated to the hilt.

Nobody else does exactly what The Trade Desk does. The closest competitors are specialized services within the larger advertising packages from tech conglomerates like Verizon's Yahoo! or Alphabet's Google platforms. This is the kind of industry leader you want in your portfolio when dealing with a fast-growing market such as online advertising.

2. Advertisers are moving online

... and the sea change has only just begun.

You know the slump in online ad markets I mentioned? It's a real disappointment that has weighed on the stock price of The Trade Desk and its sector peers all year long. At the same time, many other industries would sell their parent companies for sales growth like this:

TTD Revenue (TTM) Chart

TTD Revenue (TTM) data by YCharts

The Trade Desk's management estimates that the global advertising market was worth roughly $750 billion in 2019. Digital display ads accounted for just $50 billion of that massive pie. As streaming media and online information continue to steal market share from traditional media forms, the new alternatives also offer more targeted ads and higher efficiency. Therefore, the market is not just shifting into the online space but also growing larger over time as advertisers embrace a more effective model.

3. Digital video is a particularly palmy prospect

Online video was taking off in 2019. Walt Disney (DIS 0.33%) opened the floodgates when it introduced the Disney+ streaming service, hoping to catch up to sector leader Netflix (NFLX 2.72%) in the long run. Then, the coronavirus pandemic came along to accelerate that game-changing market trend. Now, every media publisher worth its salt has at least one streaming service of its own. Both Disney and Netflix have more than 220 million paying subscribers.

Both are about to give those numbers a big jolt as they introduce lower-priced, ad-supported service plans. Netflix turned elsewhere, but Disney+ is working directly with The Trade Desk.

This is the future of media on a worldwide scale. The Trade Desk has a big finger in this exciting pie, and should find more customers as other media-streaming hopefuls follow Disney's and Netflix's lead.

4. The Trade Desk by the numbers

I have mentioned global markets many times in this rundown, but The Trade Desk has only dipped its toes in the overseas opportunity so far. Only 14% of the company's managed ad spending fell outside North America last year. There is a lot of pie left to serve here, especially as the market itself is growing quickly.

The company's trailing revenues added up to $1.2 billion in 2021 and $1.4 billion by the second quarter of 2022. 82% of incoming revenues are kept as gross profits, since The Trade Desk's operating model is quite lean.

That growing profit base gives The Trade Desk freedom to invest in its own business-boosting prospects. Hence, sales and marketing expenses are growing even faster than those soaring revenue and gross profit lines, which sets the stage for continued high-octane growth in the years ahead.

TTD Research and Development Expense (TTM) Chart

TTD Research and Development Expense (TTM) data by YCharts

5. This stock is a great buy right now

The Trade Desk is a well-run company with fantastic growth prospects in a thrilling long-term market. However, the slower growth in ad spending plus macroeconomic fears has driven the stock price nearly 50% below last November's all-time highs.

This is not a cheap stock by value-oriented metrics, trading at 50 times forward earnings and 21 times trailing sales. But you're paying a premium for a sector-leading growth stock that isn't yet focusing on bottom-line profits. So all things considered, The Trade Desk is a no-brainer buy in my book.